Contractor's attempt to justify high cost of U.S. MOX program falls short

Frank von Hippel

On 21 September 2015, the High Bridge consulting group issued a report that presented the contractor's view of the cost of the MOX plutonium disposition route. The work was funded by MOX Services, the CB&I-AREVA joint subsidiary that has the DOE contract to build and operate the MOX Fuel Fabrication Facility (MFFF) on the DOE's Savannah River Site in South Carolina. High Bridge critiques the conclusions of the DoE "Red Team" report, which was made public in August 2015. The Red Team concluded that disposing of U.S. excess plutonium in DOE's deep-underground Waste Isolation Pilot Plant (WIPP) in New Mexico would be much less costly and risky than continuing with the current program of manufacturing mixed-oxide (MOX) fuel for U.S. light water reactors.

The MFFF contract was signed in 1999 to support one of the two plutonium disposition paths selected by the Clinton Administration--MOX and direct disposal. In 2002, when the Bush Administration decided to drop the direct disposal part of the program, it estimated that the net cost to extracting 34 tons of excess U.S. weapons plutonium from weapons pits and manufacturing it into MOX fuel would be $3.8 billion ($4.9 billion in 2014 dollars; see Table ES-3).

As of 2015, about $5 billion has been spent on construction of the MFFF and the latest estimate done for DOE was that an additional $27.2 billion (2014 dollars) would be required to complete the job (Red Team Report, Table 3, assuming a budget cap of $0.5 billion/year). The High Bridge report estimated a somewhat lower additional cost of $19.4 billion for a total cost of about $25 billion. This would still be a five-fold increase over the 2002 cost estimate.

Despite the enormous increase in the cost of the program, High Bridge argues that the benefits of the MOX program would exceed the cost because the 875 tons of MOX fuel (measuring it by its weight of contained plutonium plus depleted uranium) could be used to generate $35 billion in electricity (at the electricity's retail price). However, this argument is nothing less than creative accounting, since this electricity could be much more cheaply generated with $1.4 billion of standard LEU fuel.

The cost of 1 kg of LEU fuel can be estimated as follows: 8 kg of natural uranium at $100/kg; 5.8 SWU at $70/SWU (assuming enrichment to 4% U-235 with 0.25% left in the depleted uranium); conversion of 8 kg of natural uranium from uranium oxide to UF6 for enrichment and 1 kg of enriched uranium back at $8/kgU, and fuel fabrication at $300/kgU. This means that 875 tonnes of LEU fuel that would produce $35 billion worth of electricity would cost about $1.4 billion, which is less than 6% of even High Bridge's estimate of the cost of the MOX fuel.